National Solar Policy

Solar Decathelon

The US has a series of objectives and laws that can apply to renewable energy such as the Public Utility Regulatory Policies Act (PURPA, 1978), the Energy Policy Act (EPACT, 2005) and the American Recovery and Reinvestment Act (ARRA, 2009). The EPACT gave renewable energies a larger share of government funding, and created an Investment Tax Credit (ITC) (discussed on the Incentives page) for homeowners and businesses, for which they receive a tax credit worth 30% of their solar installation cost.

Aside from the ITC, the solar energy industry is dependent on a patchwork of state and local incentive structures that are beholden to state and local budgets. Many advocates in the industry argue is time for a consistent, national renewables policy.

The Public Utility Regulatory Policy Act (PURPA) was passed in 1978, in the midst of the energy crises that ripped through industrial world economies. One of the most important effects of the law was to create a market for power from non-utility power producers, which now provide 7 percent of the country’s power. Before PURPA, only utilities could own and operate electric generating plants. PURPA required utilities to buy power from independent companies that could produce power for less than what it would have cost for the utility to generate the power, called the “avoided cost.” This legislation set the stage for renewables to exist as we know them today.